EA Craftsman’s EA Course【012】Will EAs with a high PF (Profit Factor) from FX automated trading really make money?

What is the Profit Factor

Direct translation would be “profit element”… it doesn’t make sense, does it?

The formula is [Total Profit ÷ Total Loss], which is similar to the return on investment formula.


Profit rate is the ratio of total profit to the recommended margin, while PF is the ratio of total profit to the confirmed accumulated loss (total loss); unrealized losses are not included in the calculation.

In the end, this indicator also needs to be evaluated by how long the period is and how many trades are involved; just like the backtest period, a higher value isn’t necessarily better.

Which EA is better?

Let’s suppose there are two EAs (Strategy A and Strategy B).

If operated for one year with the same margin, A yielded a total profit of 1.5 million yen and a total loss of 1 million yen, giving a PF of 1.5.


On the other hand, B traded fewer times and achieved a total profit of 900,000 yen and a total loss of 450,000 yen, giving a PF of 2.0.

Which one is more excellent?

A made a profit of 500,000 yen. B made a profit of 450,000 yen.

Don’t React Impulsively

At this moment, immediately…

Surely A is better, right?

No, B.

Don’t answer impulsively...


What about the drawdown during the period? What is the maximum drawdown? What is the required margin? What is the shape of the equity curve and the recovery factor?

If such questions arise, that is the correct line of thinking!

Total Profit of 1,500,000 yen & Total Loss of 1,000,000 yen vs. Total Profit of 900,000 yen & Total Loss of 450,000 yen…

With just this information, you cannot tell which is superior, can you?

Which EA do you want… If both can make money, then it becomes a matter of preference, doesn’t it?

Are you seeking an EA that keeps drawing down large but ultimately earns a lot, or one that doesn’t need to earn much but keeps drawdown small even with fewer trades?

In other words, the answer lies within you. What you are seeking is the answer.

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